Hospital Governance, Performance Objectives, and Organizational Form

This paper studies the governance of a sample of California hospitals. We document a number of empirical relations about hospital governance: The composition of the board of directors varies systematically across ownership types; poor performance and low levels of uncompensated care increase board turnover, with this sensitivity varying by organizational type. Poor performance, high administrative costs, and high uncompensated care lead to higher CEO turnover, with these effects again varying across different organizational types. Overall, these results are consistent with the view that boards of directors of hospitals of different organizational forms are substantially different, and that these boards make decisions to maximize different objective functions.

Defining care products to finance health care in the Netherlands

A case-mix project started in the Netherlands with the primary goal to define a complete set of health care products for hospitals. The definition of the product structure was completed 4 years later. The results are currently being used for billing purposes. This paper focuses on the methodology and techniques that were developed and applied in order to define the casemix product structure. The central research question was how to develop a manageable product structure, i.e., a limited set of hospital products, with acceptable cost homogeneity. For this purpose, a data warehouse with approximately 1.5 million patient records from 27 hospitals was build up over a period of 3 years. The data associated with each patient consist of a large number of a priori independent parameters describing the resource utilization in different stages of the treatment process, e.g., activities in the operating theatre, the lab and the radiology department. Because of the complexity of the database, it was necessary to apply advanced data analysis techniques. The full analyses process that starts from the database and ends up with a product definition consists of four basic analyses steps. Each of these steps has revealed interesting insights. This paper describes each step in some detail and presents the major results of each step. The result consists of 687 product groups for 24 medical specialties used for billing purposes

Does Bank Institutional Setting Affect Board Effectiveness? Evidence from Cooperative and Joint-Stock Banks

Research Question/Issue Do cooperative banks suffer from board deficiencies less frequently and severely than joint-stock banks? To answer this question, we analyze banks operating in Italy during the period 2006–2012 to examine whether the governing bodies of cooperative banks are less effective in carrying out their duties than those of joint-stock banks. Deficiencies in the governing body are measured by sanctions imposed by the supervisory authority. Research Findings/Insights Findings revealed that the boards of directors of cooperative banks were sanctioned more often than board of directors of joint-stock banks. Furthermore, board turnover mediates the relationship between the cooperative status and board deficiencies. Theoretical/Academic Implications This study provides empirical evidence in support of the weakness of corporate governance in cooperative banks. Methodologically, our approach is novel in that we adopt a measure of board effectiveness/deficiency based on an independent third-party perspective (supervisory authority) that is not biased by the different objective function of the two types of banks. Practitioner/Policy Implications The findings have several policy and managerial implications. We contribute to the ongoing debate on the proposal for flexible regulation of corporate governance for cooperative banks and emphasize that policy-makers and regulators should rethink the corporate governance structures of cooperative banks. In particular, the study reveals how board turnover should be carefully monitored to reduce board deficiencies at the bank level

An inquiry into good hospital governance: A New Zealand-Czech comparison

BACKGROUND: This paper contributes to research in health systems literature by examining the role of health boards in hospital governance. Health care ranks among the largest public sectors in OECD countries. Efficient governance of hospitals requires the responsible and effective use of funds, professional management and competent governing structures. In this study hospital governance practice in two health care systems – Czech Republic and New Zealand – is compared and contrasted. These countries were chosen as both, even though they are geographically distant, have a universal right to 'free' health care provided by the state and each has experienced periods of political change and ensuing economic restructuring. Ongoing change has provided the impetus for policy reform in their public hospital governance systems. METHODS: Two comparative case studies are presented. They define key similarities and differences between the two countries' health care systems. Each public hospital governance system is critically analysed and discussed in light of D W Taylor's nine principles of 'good governance'. RESULTS: While some similarities were found to exist, the key difference between the two countries is that while many forms of 'ad hoc' hospital governance exist in Czech hospitals, public hospitals in New Zealand are governed in a 'collegiate' way by elected District Health Boards. These findings are discussed in relation to each of the suggested nine principles utilized by Taylor. CONCLUSION: This comparative case analysis demonstrates that although the New Zealand and Czech Republic health systems appear to show a large degree of convergence, their approaches to public hospital governance differ on several counts. Some of the principles of 'good governance' existed in the Czech hospitals and many were practiced in New Zealand. It would appear that the governance styles have evolved from particular historical circumstances to meet each country's specific requirements. Whether or not current practice could be improved by paying closer attention to theoretical models of 'good governance' is debatable

Examining the joint effects of strategic priorities, use of management control systems, and personal background on hospital performance

This study aims to respond to recent calls for a better understanding of the factors that support the effectiveness of formal control practices in hospitals. Based on survey data from 117 top-level managers in Belgian hospitals, the study investigates the performance effects of the alignment between the use of performance measurement systems (PMS), strategic priorities, and the particular role top-level managers’ personal background plays in this context. The quantitative results suggest that it is the top-level managers’ personal background that brings to life the benefits of the alignment between the use of PMS and strategic priorities in hospitals. Specifically, this paper shows that when the emphasis on partnership or governance strategic priority is high, the effect of the interactive use of PMS on hospital performance is more positive for top-level managers with a clinical background than for those with an administrative background. This study offers value for practitioners in that it supports the argument that hospitals can benefit from involving physicians in the top-level management team

Managerial agency costs of socialistic internal capital markets: Empirical evidence from China

Ministry of Education, Singapore under its Academic Research Funding Tier

Corporate Performance, Board Structure, and Their Determinants in the Banking Industry

The subprime crisis highlights how little we know about the governance of banks. This paper addresses a long-standing gap in the literature by analyzing board governance using a sample of banking firm data that spans forty years. We examine the relationship between board structure (size and composition) and bank performance, as well as some determinants of board structure. We document that mergers and acquisitions activity influences bank board composition, and we provide new evidence that organizational structure is significantly related to bank board size. We argue that these factors may explain why banking firms with larger boards do not underperform their peers in terms of Tobin's Q. Our findings suggest caution in applying regulations motivated by research on the governance of nonfinancial firms to banking firms. Since organizational structure is not specific to banks, our results suggest that it may be an important determinant for the boards of nonfinancial firms with complex organizational structures such as business groups

Changes in hospital service mix and cost allocations in response to changes in Medicare reimbursement schemes

After 1983, Medicare paid hospitals for inpatient services at fixed rates, but continued to reimburse outpatient services based on reported cost. Using data from Washington State we find that hospitals responded by increasing outpatient services to Medicare patients compared to non-Medicare patients-the ratio of Medicare outpatient revenues as a percentage of total Medicare revenues increased after 1983 to a significantly greater extent than for non-Medicare patients. We also find that allocations of overhead costs to outpatient departments increased after 1983. These findings suggest that hospitals change their patient mix and cost allocations to maximize hospital cash flows